Maruti Plans No-Diesel Future for India’s Small Vehicle Market

In India, the production days of the small diesel-powered vehicle are drawing to a close according to Maruti Suzuki, the country’s dominant vehicle manufacturer. Late 2018, the Supreme Court ruled that no Bharat Stage IV (BS-IV) vehicle shall be sold across the country with effect from April 1, 2020, the date BS-VI comes into effect. That decision creates enormous potential for increased adoption of Compressed Natural Gas (CNG) -powered vehicles.

Maruti Suzuki ‘WagonR S-CNG’

Maruti Suzuki will reportedly phase out all models with diesel engines less than 1.5 litres. It is the first company in India to declare a ‘no-diesel’ plan in the compact segment which made up nearly half of its total domestic sales last year. Nearly 25% of Maruti’s total domestic passenger vehicle sales in 2018 were diesel, now a declining market.

The government-backed massive rollout of city gas distribution and linking infrastructure across India will greatly enhance the attraction of CNG vehicles as gas companies plan to expand refuelling station networks. Currently in India there are approximately 3.3 millions Natural Gas Vehicles (NGV), making it the third largest NGV country in the work behind China and Iran.

According to Car Blog India, Maruti Suzuki alone observed an increase in demand for its CNG driven vehicles by 50% for the 2018 financial year.

Another media source, Money Control, reports planned discontinuation of the popular diesel version of the Super Carry – a small commercial vehicle. “Our judgment is that the cost of upgrading the Super Carry to BS-VI will be too huge. We intend to discontinue the diesel version. We will have petrol and CNG versions of the vehicle and it will become more economical for the user,” Bhargava said. A 793 cc CNG version of the mini pick-up truck is already on the market.

Maruti Suzuki Celerio Limited Edition

The company considers the small car market does not have the financial capacity to embrace the higher prices that will need to be paid for vehicles fitted with BS-VI compliant diesel engines. Furthermore, the reduction in demand is also likely to push the fuel price for diesel higher by up to 2.5 times the current price.

RC Bhargava, Chairman, Maruti Suzuki said, “The cost of upgrading small diesel engine to BS-VI standard will be significant. With the price increase, diesel cars will become unviable. We will stop selling diesel vehicles from April 1, 2020.” He explains the 1.5 litre diesel engine will become the lower limit for affordability.